Climate Fund Plan For Developing Countries

At the UN climate talks in Germany, approval has been secured for a fund to help countries around the world to deal with the effects of climate change. This will allow stricken parts of the world to be helped quickly.

By Hugh Finlay

From helping poor farmers keep up harvests battered by drought in Africa, to protecting coastal dwellers on Pacific islands from floods, a global fund helping developing countries to adapt to climate change in the world, got a vote of confidence at a recent round of climate talks at the UN.

The Adaptation Fund

After the two-week meeting in Bonn, governments agreed that an Adaptation Fund will be one of the tools for meeting the targets of the Paris climate agreement - this decision was needed to ensure the continuation of the fund.

Victor Viñas, from the Dominican Republic, as the vice-chairman of the fund’s board, said the decision will “benefit many more vulnerable communities” in the developing countries that it serves.

10 years ago as part of the Kyoto Protocol, the world’s early treaty to deal with global warming, intended to run until 2020, agreed that the Adaption Fund would start operating.

A Kyoto Protocol carbon trading mechanism levy brought almost $200 million for the fund, but this income fell as carbon prices began to fall. So governments have stepped in with contributions to support the fund, in recent years.

Governments have stepped in once more, in Bonn, with Sweden, Germany, Belgium’s Wallonia region, Ireland, and Italy helping the Adaptation Fund to raise over $93 million in 2017. Its goal will be $100 million in 2018.

“This financial institution provides critical support to help developing countries manage climate impacts,” said Paula Caballero, the World Resources Institute climate program’s head, noting that climatic impacts will intensify as the Earth warms.

Adaptation experts said the fund has shown its value to climate-hit communities during its 10-year existence - albeit with limited resources.

The Fund's Effectiveness

“The Adaptation Fund has developed some very interesting and innovative practices,” said Saleemul Huq, head of the International Centre for Climate Change and Development.

The fund has provided $462 million for projects and other activities in over 70 developing countries, which is directly benefiting almost 5.5 million people.

Most of its projects cost less than $10 million, with some costing as little as $10,000-$30,000.

The money has allowed it to pioneer methods of managing water supplies, or growing food in forest areas at local levels where it is most important, said its supporters.

This has been done partly by channeling the money to approved environmental organizations and government agencies in developing countries, which enables them to take control of the situation, and increasing their ability to handle larger amounts of finance for climate issues.

An official at Germany’s environment ministry, who leads the Adaptation Fund Board, Michael Kracht, said the fund’s projects “performed pretty well.” It is learning to improve as climate adaptation needs in the localities evolve.

A big challenge now, is finding more steady sources of donations, so that the fund is no longer begging to donors every year, Kracht said.

Matching Donations to Projects

In 2017, the Adaptation Fund received a record number of 54 project proposals costing $350 million, “reflecting the rising seas, increasing floods, droughts and intense storms occurring throughout the world”.

It will back over $104 million in new proposals. Even with the fund’s annual fundraising target met, it cannot financially support everything in the pipeline.

“There is a big demand, which the Adaptation Fund could respond to as long as there is enough money,” Kracht said.

How the fund will operate within the Paris Agreement will be worked out at the U.N. climate talks in 2018. Until then, it is unclear how the linkage will create a more secure supply of money for the fund.

One possibility is if the fund to taps the much bigger fund of its young sister, the Green Climate Fund (GCF). The GCF fund has pledges of over $10 billion, although there is some doubt about whether the United States will donate its promised $2 billion of the fund.

The adaptation expert, Huq, said that connecting the two funds makes sense, because the GCF has not been fast in getting money “out of the door” to needy nations.

“The GCF has money it can’t spend. The Adaptation Fund has projects ready to go, but it doesn’t have money. So that is a mismatch,” he said at the talks in Bonn.

Potential legal issues can be straightened out if there is the political will to merge the two funds, Huq added.

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